Waymo, Alphabet's (GOOGL) self-driving unit, is in the final stages of talks to raise more than $3 billion in debt, marking the first time the company has turned to debt financing. Lenders in the deal include Pacific Investment Management (Pimco), Blackstone, and Sixth Street Partners, according to Bloomberg.

Goldman Sachs is working with Waymo on the transaction, which could be finalized within days. Terms are still under discussion and could change.

The loan is expected to be unrated and could price at more than 500 basis points, or five percentage points, above its benchmark rate, making it a relatively expensive form of financing. The involvement of large alternative asset managers like Blackstone and Sixth Street reflects the growing role of private credit markets, which have become a major source of financing for companies seeking to raise large sums outside traditional bank lending and public bond markets. For Waymo, debt also offers a way to fund expansion without further diluting existing shareholders so soon after a major equity round.

Alphabet stock (GOOGL) was up 0.63% at the time of reporting. Wall Street holds a Strong Buy consensus on the stock, based on 24 Buy ratings and four Holds over the past three months, with an average price target of $422.96, implying roughly 25.4% upside from current levels.

After a $16 Billion Equity Round

The debt raise comes just months after Waymo closed a $16 billion equity round in February 2026 that valued the company at $126 billion — nearly tripling its valuation in under two years.

The shift toward debt reflects the company's scale. Waymo is expanding its driverless fleet rapidly while AI-related operating costs remain high. The company currently runs more than 500,000 paid rides per week across 14 U.S. cities, and its stated goal is to reach one million paid rides per week across 20 cities globally before the end of the year.

Expansion Into New Markets

Beyond the U.S., Waymo is preparing to test its service in more than a dozen additional locations, with London and Tokyo among the planned markets — an international push that carries significant capital requirements. Entering markets such as the U.K. and Japan also involves navigating new regulatory frameworks for autonomous vehicles, adding complexity beyond the capital costs of deploying fleets overseas.

The robotaxi market is also becoming more crowded. Waymo competes directly with Amazon's Zoox and Tesla's self-driving vehicles, and the race to scale is intensifying.

Custom Chip Development

On the technology side, Waymo said last month that it had developed a custom chip for its robotaxis, a move aimed at cutting costs and improving performance. Building proprietary hardware is another capital-intensive investment that adds to the company's funding needs. It is a strategy that mirrors moves by other AI-heavy companies, including Waymo's parent Alphabet, which have invested in custom silicon to reduce reliance on third-party chip suppliers.

Waymo and Goldman Sachs did not respond to a Reuters request for comment. Blackstone, Pimco, and Sixth Street Partners all declined to comment.

Waymo has historically relied on equity financing from Alphabet and external investors. Its move into debt markets reflects how much the business has grown and how much additional capital it needs to keep pace with its expansion plans.

Source: CoinCentral